Pruebita Ajsjasj

The Gold Rush and the Beginnings of California Industry
Author(s): David J. St. Clair

Source: California History, Vol. 77, No. 4, A Golden State: Mining and Economic Development in
Gold Rush California (Winter, 1998/1999), pp. 185-208
Published by: University of California Press in association with the California Historical Society
Stable URL: http://www.jstor.org/stable/25462514

Accessed: 28-01-2016 13:30 UTC
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at http://www.jstor.org/page/
info/about/policies/terms.jsp
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content
in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship.
For more information about JSTOR, please contact support@jstor.org.
University of California Press and California Historical Society are collaborating with JSTOR to digitize, preserve and
extend access to California History.
http://www.jstor.org
This content downloaded from 160.36.178.25 on Thu, 28 Jan 2016 13:30:07 UTC
All use subject to JSTOR Terms and Conditions
9
The Gold Rush and theBeginnings
ofCalifornia Industry
David J. St. Clair
THE CALIFORNIA ECONOMY ON THE EVE

OF THE GOLD RUSH
In 1845, California was a sparsely populated, remote, colonial outpost. Not counting
the 100,000 unassimilated Indians who continued to live independently, Californias
population of 17,900 (10,000 assimilated Indians, 7,000 Spanish/Mexican descen

dants, 700 Americans, and 200 was clustered the coast
Europeans) largely along
from San Diego to Sonoma.1 Monterey and Los Angeles were its cultural centers,
while San Francisco, then known as Yerba Buena, was only a small hamlet of a few
hundred people.
On the eve of theGold
Rush, themissions had been secularized and decaying for
more than a decade. Mosteconomic activity was organized around the ranchos,
large cattle ranches that produced hides and tallow, the two leading commodities
that connected California with the outside world.
Along with soap making, the
were the as in
processing of hides and tallow only activities thatmight be described
dustrial. The hides, minimally dressed and processed, were sold to mer
foreign
chants. Cattle brought from $4 to $6 per head, reflecting the value of their hides and
fat.2Ample supply and very limited demand made the meat almost worthless. The
export of hides, tallow, and small quantities ofwheat, soap, lumber, and gold financed
imports. Imported products and local crafts provided Californians with a simple
but comfortable life.
California's was
pre-gold-rush economy certainly rudimentary. Some historians
have gone further,arguing that itwas stagnant. In their
pioneering economic history,
Robert Cleland and Osgood Hardy described California from 1769 to 1848 as
an unambitious, were . .
"sparsely populated by pastoral people who seemingly.
indifferent to all material and . . .unmindful of the vast economic
progress oppor
tunities that surrounded them on every hand."3 this criticism
Although stereotypical
185
i86 BEGINNINGS OF CALIFORNIA INDUSTRY
When the amateur artist

William R. Hutton visited San Francisco in September 1847, it
was a of adobes, shanties, and frame scattered
rough-and-tumble community buildings
along Yerba Buena Cove. But following the discovery of gold at Coloma in January, the
village was transformed into a vigorous cosmopolitan city.By late 1851 ithad a population
of some thirtythousand, streets linedwith solid brick edifices, and one of the busiest ports
in the nation. CourtesyHuntington Library, SanMarino, Calif.
is unwarranted, there is no doubt that the California economy was small and largely
undeveloped.
The Gold Rush unleashed a torrent of on this
change pastoral economy. Its first
effectwas to
disrupt the economy.Workers, ranch hands, and shopkeepers rushed off
to seek their fortunes in the
gold fields. One San Francisco newspaper printed its last
edition in 1848 with the following declaration:
The majority of our subscribers and many of our advertising patrons have closed their
doors and of business and left town. . . We
. have also received information that
places
verymany of our subscribers invarious parts of the country have left theirusual places
of abode, and gone to the gold region. . . .The whole country from San Francisco to
Los Angeles and from the sea to the Sierra Nevada resounds with the sordid cry of
"gold! GOLD!! GOLDUr while the field is lefthalf planted, the house half built, and
everything neglected but themanufacture of shovels and pickaxes.4
BEGINNINGS OF CALIFORNIA INDUSTRY
187
we have no statistics, must have suffered.

Although production Fortunately, the
disruption
was
only temporary,
as many who rushed off in search of fortune re
turned after finding only hard work and little gold. However, the lure of gold kept
labor at a premium, at least at first, and high wages were a common complaint.
John Hittell, a contemporary commentator, argued that high wages delayed indus
trial development in California.5
Those returned from the gold fields found a very different economy.
who
a
Overnight, gold transformed California's lethargic business world into surging
boom. People rushed in and gold poured out into theworld economy, as California
became the center ofworld production of precious metals. The surge of population
an demand that turned the traditional economy upside
brought unprecedented
down. The scrawny Spanish-stock cattle that earlier had sold for $5 per head now
to to
brought $300 $500 per head feed hungry miners with gold in their pockets.6
By the beginning of 1849, California's population had reached 26,00o.7 By the
summer, it jumped to 50,000. San Francisco became the world's fastest growing
to 25,000 in 1850.The official census
city, its population exploding from 812 in 1848
of 1850 recorded 92,597 people living in the state,while unofficial estimates put the
correct figure at 115,000. California's population rose to 380,000 in i860,560,000 in
1870, and 865,000 in 1880.8 its first century as a state, California's

During population
doubled roughly every twenty-five years.
was soon as well. Herds
Mining surged, and California agriculture booming of
cattle and sheep driven to California augmented local supplies. Wheat output in
creased dramatically. By i860, California was producing five times as much wheat as
all other western states and territories combined. California wheat exports poured
into world markets. Vineyards were also planted and a wine industry took root
within a couple of years of James Marshall's discovery. The impact of gold on Cal
ifornia agriculture has generally been appreciated, but what about California indus
Was
try? it similarly influenced, or were money, labor, and energy channeled instead
only into gold mining and agriculture?
HISTORIOGRAPHY OF CALIFORNIA INDUSTRY DURING

THE GOLD RUSH
Historians have offered divergent views of California industry

during theGold Rush.
All acknowledge that important first steps were taken
during these years, but many
argue that industrial development lagged until the last decade of the nineteenth
century, or even later. John Hittell began his 1862 survey of California industry, The
Resources ofCalifornia, with a list of reasons com
why the state's industry could not
pete with eastern or European producers.9 High wages, high interest rates, and a lack
of coal, iron, and cotton supplies, he argued, were barriers that
producers could not
l88 BEGINNINGS OF CALIFORNIA INDUSTRY
A team of oxen hauls a wagon loaded with barrels of lime from theDavis & Cowell kilns
at Santa Cruz, about 1865.The rapid rise of urban California that began with theGold
Rush created a huge demand for lime, an essential element in themaking ofmortar, plas
ter,and cement. Lime production emerged as a leading industryof Santa Cruz atmidcen
tury,and by 1868 the company was shipping a thousand barrels a week, helping tomake
Henry Cowell one of the richestmen in the county. Courtesy Society ofCalifornia Pioneers.
hurdle. In the 1879 edition of the same book, Hittell added the following to his list
of obstacles retarding industry: a lack ofwater power near cities, high transportation
costs, expensive water in large towns, expensive land prices near deep-water ports,
and insecure land titles.10According toHittell, these obstacles
prevented California
from exporting any manufactures, kept industry only producing crude industrial
states exports to unfinished or semi-finished resources.11
products, and limited the
s 1879 edition chronicled more industrial
To be sure,Hittell activity in the state by
that date, but he still described California products as being "mostly of a crude
class."12 He argued that California were able to survive because
producers high
costs made outside goods less competitive in the California market.
transportation
189
Hittell concluded that "California agriculture and mining industries had reached ad
vanced development in some branches, while our manufactures are backward."13
was its failure to embrace steam power,
Symptomatic of the state's retardation rely
on its human muscle, to its "great disadvantage."14
ing instead
Hittell's views became less pessimistic in his laterwork, but historians have echoed
his negative themes down to the present. One author of a survey history of the
state,Andrew Rolle, observed that large-scale manufacturing inCalifornia appeared
on the scene" due to unstable conditions inCalifornia and its distance from
"tardily
large eastern cities.15 Earl Pomeroy concludes that during the Gold Rush "Western
or even deteriorated while Western
industry lagged agriculture advanced in tech
to was that "Western
nique and prospered."16 According Pomeroy, the problem
manufacturers could not compete with the mass states ex
production of the older
that had to be custom-made or cost too much to
cept in goods ship."17 In addition,
San Francisco businessmen "were content to put their capital into the finished goods
that came from the East."18
Rice, William note that in i860 San Fran

Richard Bullough, and Richard Orsi
cisco ranked fifteenth among American cities in terms of population, but only fifty
first in terms of manufacturing "because conditions then discouraged heavy indus
try in the city and state."19 Scarce coal and iron, prohibitive interest rates, and more
lucrative prospects inmining, transportation, and land delayed industrialization un
til the i86os and early 1870s. on
They argue that isolation brought by the Civil War
was a factor in
stimulating industrial growth, but concede that the industrial de
mands of new mining techniques were more important.
Other writers argue that the Civil War had a greater impact on California indus
try.Cleland and Hardy credit disrupted trade with the East Coast with
affording
more forCalifornia's infant industries, themanufacture of boots,
protection including
shoes, clothing, chemicals and drugs, furniture, iron and steel, distilled liquor, soap,
candles, and tobacco products.20 Rolle argues that the Civil War not only provided in
fant industry protection to California firms, it also turned San Francisco into an ex
port center for grain, flour, lumber, wool, mineral ores, quicksilver, and other prod
ucts.21The implication in these accounts is that California was
industry delayed until
thewar, an external event, forced California to their own resources.
producers develop
However, this stimulus was short-lived, making the industries that benefited from the
war vulnerable to the inevitable downturn that came with peace.
exceedingly
W. H. Hutchinson writes thatwhile California lacked the coal and iron necessary
for industrial expansion, the state a basic
"quickly established heavy industry because
she had to."22Cleland and Hardy repeat Hittell's discussion of the obstacles retard
ing California industrial growth, but nonetheless cite "a material advance" in Cali
fornia industry between 1850 and 1870,
especially during the Civil War.23 However,
they argue that in
higher profits mining and agriculture meant that little "serious at
190 BEGINNINGS OF CALIFORNIA INDUSTRY
tention" was sees

accorded Californiaindustry until 1900.24 Likewise, Gerald Nash
Californias industrial stage as beginning in 1900.25
More positive views have been expressed by historian John Caughey and journal
ist Carey McWilliams. Caughey writes that California manufacturing developed
"hand in hand" with mining, commerce, and agriculture in northern California.26
McWilliams takes a different tack, arguing that California enjoyed the advantages of
a head start in the sees California a manu
competition for industry.27He becoming
center almost at the same time that it became a state.28 to
facturing According
McWilliams, Californias early start in industrialization was a distinct from
departure
the norm, a great exception brought about by the novel conditions created by the
Gold Rush and California s unique environment. The Gold Rush, he argues, created
"certain underlying dynamics" that became the hallmark of the California economy.29
THE PACE OF INDUSTRIAL GROWTH DURING

THE GOLD RUSH
comments about the pace of California are not

Disparaging industry supported by
U.S. census data.30 Statistics for California first appear in the census of 1850.While
this census is not entirely accurate (incomplete and lost data resulted in an under
count), it does offer insight and a starting point. Table 9.1 shows estimates of Cali
fornia manufacturing from the 1850 through 1880 censuses.
The 1850 census ranked California manufacturing sixteenth (by value of output)
a in the
among the thirty-six states and territories, remarkable achievement in itself
first year of statehood. By i860, California manufacturing output had risen to sev
enth place, growing by 430.6 percent during the 1850s. This growth was far faster
than that of any other state. Table 9.1 also shows the number of manufacturing es
tablishments. Between i860 and 1870, the number of establishments appears to drop
a modest This
precipitously along with drop in the value of manufacturing output.
would be consistent with a revival of competition with the outside world following
thewar and the opening of the transcontinental railroad in 1869. However, there is
a the decline. Census data for both 1850 and i860 include
simpler explanation for
theGold Rush of the early
"mining" in the "manufacturing" category. Consequently,
1850s and the consolidation of mining in larger companies after those years appear
in manufacturing statistics, thus distorting the data and begging the question at
hand.
A better picture of industrial growth emerges when gold mining is removed from
these figures. Table 9.2 shows California manufacturing with gold mining excluded.
These figures reduce the size of the "manufacturing" sector reported in the census,
but still show California with an industrial sector larger than nine other states and
and i860, Californias industrial sector
territories.More importantly, between 1850
BEGINNINGS OF CALIFORNIA INDUSTRY 191
Two of the first ironworks inCalifornia, the Pacific Iron Foundry, left,and theVulcan
waters ofYerba Buena Cove in a daguerreo
Foundry, right, stand silhouetted against the
type probably made in thewinter of 1852-53 from the corner of First and Howard streets,
San Francisco. Although steamship repairs played an important role in the early rise of
foundries and machine shops, itwas the needs ofmining that contributed most to the
was the leading manu
growth of ironworking, which by the conclusion of theCivil War
facturing industry in theGolden State. California Historical Society,FN-08452.
than the 396.4 percent growth

(excluding gold mining) grew by 510.6 percent, faster
in gold mining. By i860, California was
industry (again excluding gold mining)
was sectors (with mining still
ranked eighteenth, and larger than themanufacturing
included) of twenty-one other states and territories. In addition, when the distortion
of gold mining is removed from manufacturing statistics, there is no decline in the
number of establishments or output after i860.
By 1870, California ranked twenty-fourth in population and sixteenth inmanu

manu
facturing output (gold mining excluded). Table 9.3 shows 1870 population,
six states with
facturing output, and output per capita forCalifornia and other larger
and sectors. California manufacturing output per
populations largermanufacturing
capita exceeded that of Ohio and Illinois, but was still well behind the others.
TABLE 9.1
CaliforniaManufacturing
Year Number ofEstablishments Value ofOutput (in dollars) Percent Change
1,003
1850 12,862,522
i860
8,468 68,253,228 430.6
3,984
1870 66,594,556 -2.4
1880_5^885_116,218,973_83.6
source: U.S. Census 1850, i860, and 1880. U.S. Census,
of
Manufactures, Population i8jo.
TABLE 9.2
CaliforniaManufacturing, Excluding GoldMining

Year Number ofEstablishments Value ofOutput (in dollars) Percent Change
80 1850 3,854,378
i860
1,426 23,535,895 510.6
3,984
1870 66,594,556 182.9
1880_5,885_116,218,973_74.5
source: U.S. Census i860, and 1880. U.S. Census,
ofManufactures, 1850, Population i8yo.
TABLE 9.3
Manufacturing Per Capita in i8yo

Manufacturing Output Manufacturing Per
State
Population (in dollars) Capita (in dollars)
California 560,000 66,594,556118.92

Illinois 2,540,000 205,620,672 80.95
Massachusetts 1,457,000 553,912,568 380.17
New Jersey 906,000 169,237,732186.80
New York 4,383,000 785,194,651 179.15
Ohio
2,665,000 269,713,610 101.21
Pennsylvania_3,522,000_711,894,344_202.13
source: Population statistics are fromU.S. Department of Commerce, Historical Statistics
to 19J0 (Washington, D.C.: Government Printing Office, 1975).Manu
of theUnited States
statistics are from U.S. Census 1880. are the au
facturing ofManufactures, Per-capita figures
thors calculations.
not a flawless measure of the sector, but it is in

Output per capita is manufacturing
dicative and does compensate for differences in population.
By 1880, California still ranked twenty-fourth in population and fifteenth in agri

cultural output, but had moved up to twelfth inmanufacturing output.31 California's
was about the same as Illinois's, and still
per-capita manufacturing output in 1880
greater than Ohio's. California manufacturing per capita also increased relative to all
of the states shown inTable 9.3, except Illinois.
measure then, California
By any manufacturing grew rapidly during the Gold
Rush. Rapid simultaneous development inmining and agriculture, or more rapid in
dustrial growth in later years, do not alter this. Itwill be argued below that this rapid
was of an industrial core that laid the
growth accompanied by the development
foundation for the state's future industrial growth. There was no significant delay or
in were for
lag developing California industry, and while the obstacles to growth
midable, the history of California a
industry is story of overcoming these obstacles,
not to them.
succumbing
THE EFFECT OF THE GOLD RUSH

ON CALIFORNIA INDUSTRIES
The Gold Rush influenced California industries in threeways. First, theGold Rush
precipitated the population boom that created a soaring demand for a wide range of
consumer and or no direct connec
producer goods. These products often had little
to
tion gold mining. In these cases, therewas nothing unique about the gold indus
was an economic
try, it merely the sector that fueled expansion fromwhich other in
dustries benefited. Second, direct gains accrued to industries linked to the
gold
industry.An expanding gold industry demanded inputs and technologies from sup
plying industries. Third, and perhaps most important, technologies and industrial in
frastructure developed for the gold industry were transferred to other sectors and
products. The gold industry was the catalyst for the creation of an industrial infra
structure centered around a
foundry-machine shop core.
LINKS TO CONSUMER GOODS INDUSTRIES
The increased demand for food, clothing, shelter, transportation, and construction
materials was initially metmostly with imports. For example, glass bottles were in
such demand that old bottles fromHonolulu, Tahiti, andMexico were collected and
to San Francisco.32
shipped Imports from the East Coast followed, but breakage and
transportation costs doubled their price. Local production of glass began in San
Francisco as early as 1862.
Similarly, the first stone house built in San Francisco was
constructed in 1854 of imported Chinese marble.33 But within two years, stone from
was
California quarries replacing imports. Likewise, California initially imported all
of its flour, and the firstflour mills in the state got their start remilling imported flour
that had spoiled in transit. Flour production expanded rapidly as California swheat
crop grew, and flour imports ceased in i860. California flour production continued
to toworld markets.
expand, exporting
In contrast, California began immediately after the perishable beer
breweries
shipped from the East Coast spoiled in transit.34By 1881, San Francisco had thirty
eight breweries, the first erected in 1850.Many California brewers specialized in
"quick-brewed beer" that

was brewed in only three days, no doubt sacrificing taste to
speed and quantity.

San Francisco grew first as a bustling trade center before becoming the center of
in
California industry.Table 9.4 shows the date and location of selected California
dustries established by i860. San Franciscos domination is apparent, as is its diver
It is also hard to discern any or here.
sity. delay lag
i860, Californias industries, in order of size of output, were flour
By largest
steam
milling, lumber, sugar refining, machinery (including engines), and malt
were flour
liquors. The largest industries in 1870 milling, lumber, machinery, boot
and shoe findings, sugar refining, quartz milling, and cigar making. These were
consumer to a certain extent, lum
mostly goods industries (except machinery and,
ber) that thrived in the general prosperity initiated by the Gold Rush.
Flour and lumber mills proliferated. Ninety-one flour mills and 279 lumber mills
were in operation by i860, compared to only 2 and 10, respectively, in 1850. The
is shown inTable 9.5. Flour mills produced half
growth of California flour milling
of the food (by value) produced in the state. In addition, flour and lumber mills were
for California machinery. Cali
capital intensive, further augmenting the demand
fornia flour mills employed more than 12 percent of the states steam engines in
1870.
California boot and shoe production is shown inTable 9.6. The sharp increase af
ter i860 in output-value probably reflects the disruption of imports during the Civil
War. The figures inTable 9.6 also suggest that California producers were able to
weather the competition from the resumption of imports following the end of the
war and the railroad.
completion of the transcontinental
California woolen mills provide a good example of how Californias post-gold-rush
success has drawn attention away from the states industrial progress.
agricultural
Californias firstwoolen mill was opened in San Francisco in 1858.35By 1881, there
were thirteen mills operating in the state, consuming 20 percent of the state's wool
and producing woolens valued at $4.85 million. Woolen imports in that year
amounted to another $5million to $6 million. Eighty percent of California wool was
toHittell, the source for these figures, this high ex
exported unworked. According
condition
port ratio was "one of the most striking examples of the underdeveloped
TABLE 9.4
SelectedCalifornia ConsumerIndustriesEstablished by i860
Industry Year First Firm Location
Established
Beer 1850 San Francisco
Book Publishing 1850 San Francisco

Book Binding i860 San Francisco
Bricks 1854 Sacramento
Coffee Grinding 1850 San Francisco
Coffins i860 San Francisco

Comforters i860 San Francisco
1856 San Francisco

Cordage
1849 San Francisco
Confectionery
Chocolates 1852 San Francisco
Cordials 1852 San Francisco

Crackers 1849 San Francisco
Distillery 1855 San Francisco
Furniture Shop 1850 San Francisco
Furniture Factory 1857 San Francisco
Gold Beating 1853 San Francisco
Granite Quarry 1853 Mormon Island

Jewelry 1853 San Francisco
Lime Kiln 1853 Santa Cruz
Macaroni 1855 San Francisco
Mustard Grinding 1850 San Francisco
Woolen Mills 1858 San Francisco
Paper 1852 Alviso

Printing 1851 San Francisco
Plumbing 1853 San Francisco
Sailmaking 1853 San Francisco
Sugar Refinery 1855 San Francisco
Upholstery 1853 San Francisco
Vinegar 1854 San Francisco
source: the author from various sources.

Compiled by
of our manufacturing industries."36 However, ifCalifornia woolen mills had pro

duced woolens sufficient to replace all of her imports in 1881, it stillwould have ex
ported 60 percent of itswool. The problem, if that iswhat it should be called, was
not an a
underdeveloped woolen industry, but rather large wool output.
The Gold Rush also saw the beginnings of many well known names and labels.
Ghirardelli a chocolate
Domingo opened factory in San Francisco in 1852. Claus
Spreckels began his sugar refinery business in San Francisco in 1863. Levi Strauss
David Hewes's steam paddy,which carried sand for bay fill,passes before the San Fran
cisco Sugar Refinery atHarrison and Eighth streets.Constructed in 1856 by a corporation
headed by the Forty-niner George Gordon, thiswas the first sugar refineryinCalifornia
and the beginning of an industry that ultimatelywould emerge as themost economically
on raw sugar fromBatavia andManila, Gordon's
important in the city.Relying at first
refinery
was
capable of processing sixteen thousand pounds of sugar a day. California
Historical Society,FN-10655.
trousers for California miners and workers. Folgers Coffee and

originally made
Schilling Spices both got their start in San Francisco. The Studebaker Brothers, later
automobile pioneers, started in a carriage shop in the gold-mining town of Placerville.
LINKS TO PRODUCER GOODS INDUSTRIES
Many industries were connected to the gold industry through supplier-customer

links. These could be either forward or backward linkages. Forward linkages are
connections with "downstream" industries, that is, industries that utilize the product.
In contrast, backward linkages are "upstream" connections to industries that provide
raw materials or in question.
machinery used in the production of the product
197
TABLE 9.5
CaliforniaFlourMills
Value ofOutput
Year
Number Mills
of (in dollars) Percent Change
1850 2 754,192
i860 91 4,620,952 512.7
1870 115 9,036,386 95.6
1880_150_12,701,477_40.6
source: U.S. Census i860, and 1880. U.S. Census,
ofManufactures, 1850, Population i8jo.
TABLE 9.6
California Boot and ShoeProduction
Number of Value ofOutput
Year
Establishments (in dollars)Percent
Change
70 i860 179,235
1870 42 2,223,457 1,140.5
1880_546_4,666,814_109.9
source: U.S. Census i860,1880. U.S. Census, No data is
ofManufactures, Population i8jo.
available for boot and shoe production in 1850.
Forward to
linkages gold mining included jewelry making, gold beating (to pro
duce gold leaf), and coin minting. were undertaken in San
Jewelry and gold beating
Francisco, but neither was
particularly significant. In 1850, however, private mints in
San Francisco began minting gold coins to alleviate Californias currency shortage.
These private mints operated until a U.S. mint opened in San Francisco in 1854.37
While forward linkages were not extensive, gold s backward were very
linkages
significant. To appreciate these connections, it is to see as an
important gold mining
as a or find.
industry, rather than discovery Perhaps themost common image of the
California gold miner is that of a bearded, grizzled prospector bent over a stream,
panning for gold.While thismay have been
typical ofmany of the early Forty-nin
ers, it does not accurately reflect gold mining after it quickly became more of an in
an adventure.
dustry and less of
There were different types of gold mining with different links to other industries.
The Forty-niners used simple placering techniques, including panning and the use
of rockers, toms, and sluices. Before i860,
placer gold mining accounted for about 99
percent of the gold produced in California.38 All placering techniques used water,
motion, and trapping mechanisms such as ridges and cleats to separate
gold from
mud and gravel.While
larger gold flecks could be picked out of the pan or sluice,
The Pioneer Woolen Mills at Black Point, San Francisco, 1865.Though wool was sheared,
and woven at the Franciscan missions at least as as itwas not until
carded, spun, early 1786,
of a century later that the manufacture of woolen arose as an
nearly three-quarters goods
important industry inCalifornia. Courtesy Society ofCalifornia Pioneers.
most of the
this mechanical separating left gold behind. To improve yields from
as well), mercury, or as itwas
placering (and other types of gold mining quicksilver
was added to concentrated ores. The formed an
commonly called, mercury amalgam
with gold and silver.The amalgam was collected and the mercury driven offwith
heat, leaving the precious metals behind. Some of themercury could be recovered for
were
subsequent use, and the gold and silver separated with acids. The backward
to
linkages from placer mining thus included links quicksilver, lumber, and the acid
meet the demand from mints and mines, acid production in San Fran
industry.To
cisco began in 1854. Lumber was needed for rockers, toms, and sluices. Quicksilver,
mined from California mines, was indispensable to gold and silver recovery until the
invention of the cyanide process in 1890.
out.
By the mid-i85os, however, simple placer mining sites had been played Hy
draulic mining and dredging, more advanced forms of placering, were developed to
ores. Both are very

work less accessible hydraulic mining and dredging capital in
tensive, with more extensive and links to other California in
significant enterprises.
to meet the demand for leather hoses, pumps, and nozzles. The
dustry expanded
dams and flumes required for hydraulic mining also dramatically increased the de
mand for lumber. Lumber mills responded with special planks, narrower at one end
so to end, to construct the
they could be readily attached end long wooden channels
for hydraulic sluices. Leather hoses were made in San Francisco starting in 1857.Cal
ifornia oak-tanned leather was stronger than leather used by eastern and European
hose producers.39 As
a consequence, California hoses were superior products,
stronger and less expensive. Eventually, California leather hoses were exported
around theworld and were used extensively by fire departments until rubber hoses
replaced them after 1874. Nozzles, first made of wood, were soon crafted out of
metal in California foundries. Dredging was initially tried in 1850 on a river boat
converted to the task of capturing gold from river bottoms nearMarysville.40 How
ever, dredging did not become important until after 1880,when court rulings limited
The Risdon Iron and Locomotive Works of San Francisco pro
hydraulic mining.
duced a larger dredge in the 1890s that ignited interest in the technology. Dredging
remained an important mining technique into the 1940s.
Quartz, or hardrock, mining had the greatest impact on California industry.Gold

embedded in quartz was discovered early
as
as 1849, and was followed
by
a wave of
a
speculative excitement. But the excitement ended in bust, and the quartz mining
that survived was carried out on a small and unprofitable basis formany years. Rod
man Paul observed that as late as 1859-60, the cash returns to quartz mining could
be written off as unjustified were it not for the unique technologies invented in this
activity.41Later, hardrock gold mining in California, Comstock silver mining, and

the development of a California mining equipment industry owed much to the per
sistence of these early ventures.
Hardrock mining entailed tunneling to reach the ore, digging it out and bringing
it to the surface, and finally crushing and processing the ore. All stages of this activity
were
capital intensive and required specialized machinery. To get at the ore, drills and
were used to
explosives dig through rock. San Francisco foundries and machine
shops developed drills that reduced friction, breakage, and fuel consumption.42 Hand
drills were quickly replaced by steam-driven patent drills. Steam engines were orig
to power the drills, but this
inally taken down into themines drastically reduced their
efficiency. The air compressor permitted steam engines to remain above ground
with hoses supplying the compressed air to the drills. More leather hoses were
needed.
were also used to

Explosives get at ore. Imported black powder was originally
used, but transporting it was were
dangerous, and shipments disrupted by the Civil
War. Within the state, the California Powder-Works near the
opened city of Santa
Cruz in 1861 to produce black powder.43 The company subsequently opened a sec
ond facility near Point Pinole to produce its highly explosive "Hercules" powder.
Acids were used in themanufacture of these explosives, leading to the development
of yet more satellite industries. California explosives were shipped throughout the
West for use in mines and railroad construction and were exported to Canada,
Hawaii, and Latin America, especially Mexico.44 California's explosives industry,

however, did not lead to the of an armaments at least not in
development industry,
the nineteenth century. The manufacture of guns remained an eastern
specialty.
on the other hand, were
Blasting techniques developed in the gold mines, applica
ble to the mining of other minerals. One of the more was
interesting applications
found inCalifornia's marble was
quarries, where precision blasting of marble blocks
perfected.
All but the shallowest of hardrock mines required drainage, venting, and hoisting.
Timbers and lumber were neededfor hoists, supports, and shoring. Hoisting ma
chines and steam engines were produced by California foundries and machine shops;
San Francisco wire and cable makers made cable for hoists and ore trams. In addi
tion,most mining machines used leather belts in conveyers and drives; by 1861, four
San Francisco firms manufactured leather belts superior to competing eastern and
European products.45
San Francisco foundries also produced most of the pumps used to pump water out
of California and Comstock mines.46 The Risdon Iron and Locomotive Works
water use as well as
manufactured pipe for in VirginiaCity, irrigation pipe for
Hawaiian plantations, and made pumps for the Chollar
the much-acclaimed
an
Norcross Mine.47 Pumps provide interesting example of how California firms
overcame the obstacles
working against West Coast manufacturing. California
were man
foundries produced mostly mining pumps, which large and designed and
ufactured to order. California foundries relied on their design expertise, their prox
to to compete against cheaper
imity mining company customers, and superior service
eastern imports. Although they succeeded in securing the bulk of the mining busi
ness, they could not compete with eastern firms in themarket for smaller pumps for
cisterns, household use, or small business applications.48 Small eastern pumps were
for up to 60 percent less than
mass-produced, employing cheap child labor, and sold
local,West Coast rivals. California producers enjoyed neither the labor force, the low
to compete in thismarket.
wages, nor themarket size thatwould have enabled them
California steam engines were also developed for the mines. The census
1870
records forty-two steam in use in California mines, many made by Califor
engines
nia companies.49 California ranked ninth in the number of steam engines used in
mines. This is all themore impressive in light of California's water-power resources.
California also ranked first in the use ofwaterwheels as a power source inmines, em
in use in the United States in 1870.While steam
ploying 70 of the 134waterwheels
BEGINNINGS OF CALIFORNIA INDUSTRY 20I
A workman poses with one of themassive steam engines at themill of theGould Sc Curry
Mine, Virginia City. On theComstock Lode, powerful engines manufactured in San Fran
cisco drove a range of hardrock mining machinery, including pumps, compressors, hoists,
and stampmills. CourtesyHuntington Library, SanMarino, Calif.
were use to other California

engines developed for themines, their spread industries.
In 1870, therewere 604 steam engines in use in the states manufacturing establish
ments. The lumber industry,flour mills, distilleries, and the iron trades often utilized
steam power. The assertion that California to em
industry lagged because it failed
brace steam engines is simply not correct.
ores to be a formidable rock
Processing quartz proved challenge. Ore-bearing
was first broken into smaller, more This was followed
manageable pieces. by grind
ing. California initially imported grinding machines from Europe for this task, but
these, according to John Hittell, proved to be "fancy and usually worthless."50 They
were in favor of arrastras, devices that dragged
quickly abandoned simple Mexican
heavy
stones over the ore. A Chilean version substituted a mill stone.
Slow and ineffective, arrastras were soon replaced by California stamp mills,
which used heavy iron feet,mechanically lifted and dropped, to grind the ore. They
were
produced by California foundries and machine shops. Rodman Paul calls hy
draulic mining and the California stamp mill the crowning technological achieve
en
ments of the California Gold Rush. The stamp mill was especially important in
couraging the development of local foundries and mining technology.
Because about two-thirds of the gold in quartz ores was not recovered by early
processing methods, California miners, working with local foundries and machine
to more
shops, rapidly developed other techniques improve yields. Paul claims that
progress was made in the first twelve years of the California Gold Rush than had
occurred over the
previous several centuries.51 Californians invented concentra
tors, machines that generally used conveyer belts and shaking motion to further
concentrate ores before amalgamation. They also developed a second
grinding
process, often with mercury added. In the late 1850s, metal pans with mechanical
steam heat to facilitate amalgamation. These tech
stirring devices and emerged
were later into the vats used in theWashoe process on the
niques incorporated
Comstock.
on the
All these mining developments stimulated California industry.The effect
metal working industries appeared immediately in census data. In 1850, half the
state's manufacturing establishments not involved in gold processing were black
smith shops. Since therewere no separate census categories for "foundries" or "ma
chine shops," these were included in blacksmithing. In terms of value of output, Cal
ifornia blacksmithing ranked third in the nation, behind only New York and
a state thatwas less than two years old. By 1880,
Pennsylvania. This is remarkable for
now enu
the output-value of California foundry and machine shops, separately
merated, ranked eleventh among the states, but seventh on a per-capita basis.52 In
in output, and second in output per capita.
blacksmithing, California ranked seventh
The size of the ironworking trades is obscured by the increasing complexity of the
census. This category includes blacksmithing, foundries and machine shops, wire
and cable making, iron pipe, pumps, steam engines, saws, shipbuilding, wheel
These activities formed the core of nine
wrighting, and other types of enterprises.
censuses cat
teenth-century industry.After 1850, successive expanded the reporting
accurate and useful for some purposes, the growth of
thiswas more
egories. While
ironworking in the aggregate is lost.Table 9.7 recombines these separate categories
in the census into an aggregate "iron working trades" industry.The increase in iron
trades, despite the state's poor natural endowment of iron ores and coal, is
working
striking.
TABLE
9.7
California IronWorkingTrades
Numberof Value of
Output
Year
Establishments (in dollars)
1850 42 1,158,200
i860 376 5,853,158
1870 861 8,518,768
1880_994_10,889,437
source: Calculated from data in U.S. Census i860, and 1880. U.S.
of
Manufactures, 1850, Pop
ulation Census, "Iron trades" includes all iron census
i8jo. working working categories.
THE SPREAD OF GOLD INDUSTRY TECHNOLOGIES
were not confined to that sector. As

Technologies developed for the gold industry
out above, such devices as hoses, steam
pointed engines, and pumps all found their
way to other sectors of the economy. Nathan has called this process
Rosenberg
was vital to
"technological convergence," and maintains that it creating themachine
tool industry on the East Coast in the early nineteenth century.53The textile indus
try,he argues, was the initial catalyst for technological convergence on the East
Coast.
Technological convergence can be seen inCalifornia, but with gold mining serv
as the
ing catalyst. The blacksmith shops, foundries, and machine shops that pro
duced the equipment for the gold industry also created an indus
technologies and
trial base that could later be employed in
shipbuilding, in the defense industry, and
in other types of manufacturing. By the 1880s, for were
example, California firms
most of the on
supplying machinery used Hawaiian plantations and in sugar cane
processing, replacing European imports.54 Californias hydroelectric power also had
early connections to the Gold Rush.55 The first hydroelectric operation in the state
was undertaken in northern California in 1879. Soon after,Lester A. Pelton, a mill
wright and carpenter in the

Mother Lode town of created the turbine
Camptonville,
wheel generator, building on
technology developed for gold mining.
The cable industry provides another example of
technology dissemination. A. S.
Hallidie, president of the California Wire-Works Company, made
screens for quartz
mills and flour mills, riddles, and many other wire
birdcages, fenders, fireguards,
use in
products for kitchens and industry. In 1868,Hallidie invented a wire ropeway
for transporting ores. Soon after, he used the same to invent the cable
technology
railway,which powers San Franciscos famous cable cars.56
California s oldest
foundry, theUnion IronWorks, also illustrates how
gold min
ing technologies were transferred to other industries. Founded in 1849 by three
brothers, Peter, James, andMichael Donahue, theUnion IronWorks overcame the

iron shortage by buying scrap iron made plentiful
by the fires that destroyed San
Francisco in the early 1850s. As did a host of other San Francisco foundries, it used
the scrap metal and iron imported as ballast tomake mining equipment. The Union
IronWorks a one estimate) of the
produced large share (90 percent by mining
equipment used by California and Comstock mines.57 From mining equipment, the
Union IronWorksbranched out to supply other ironworking industries. It built the
first locomotive on theWest Coast in 1865. It repaired ships, made ship engines, and
assembled ships, including the first steel ship made on theWest Coast, the collier
in 1885.The company then won one of the first
Arago, major Navy construction
contracts awarded a California firm and built the first steel on the
warship produced
West the Charleston, in 1888. In addition, Peter Donahue was instrumental in
Coast,
street railroads.
constructing
One striking difference between California producers and their eastern coun
terparts that encouraged technology dissemination was the degree towhich Cali
fornia producers did not specialize. Eastern foundries and machine shops tended to
a
specialize in the production of few products. However, with many smaller local
markets, California foundries often made more than twenty products, "everything
that is in demand, from mining-machinery, locomotives, steamship engines, sugar
mills, and architectural iron-work, down to the various small articles required for
was
every-day use."58 Diversity also typical of California's agricultural equipment
producers.59
The difference between eastern and western foundries was probably due
to the
wider markets in the East, which facilitated specialization. It was also due to the
ofwestern foundries. Mining was very diverse and often
mining origins equipment
custom-made. San Francisco foundries survived by staying flexible, by experiment
a wide array of
ing, by innovating, and by producing products. Carey McWilliams
a to was a
argued that willingness experiment long-standing hallmark of California
that had taken root in the state's mining past.60 Equally important, the diversity of
California foundries and machine shops probably speeded up the process of tech
nological it became more of an in-house process on theWest
diffusion because
Coast, facilitating easier transfer of technology from product to product.

was often a
Finally, the discovery of other minerals by-product of the search for
gold during the Gold Rush. Silver, borax, petroleum, coal, chromite, and copper
were discovered as
gold seekers scoured the countryside. The Comstock Lode, pri
was discovered
marily silver, by California miners looking for gold.
There was, however, one notable exception to this pattern.When California was
still part ofMexico, was discovered at New Almad?n, near San Jose, in
quicksilver
1845.While its discovery and initial development preceded Marshall's discovery,
the New Almad?n Mine (and the other California quicksilver mines that soon fol
San Franciscans press forward towatch the launching of the ironcladmonitor Camanche on
November 14,1864. Assembled at theUnion IronWorks with partsmanufactured in the
East and sent around theHorn, itwas the second warship built inCalifornia. Slightlymore
than twentyyears later, theUnion IronWorks made a successful bid to construct theU.S.
Navy's Cruiser No. 2, the Charleston, one of the firstvessels in the country's "New Navy"
and the ship that inaugurated themodern era of shipbuilding inCalifornia. Courtesy
Society ofCalifornia Pioneers.
lowed) enjoyed robust demand during the Gold Rush. Among mineral industries,
was second to
quicksilver only gold in output-value until the end of the nineteenth
century. More importantly, it is hard to imagine what the Gold Rush and the Com
stock silver rush would have been like in the absence of local supplies of quicksilver.
In the last half of the nineteenth century, California produced half of the world s
a world cartel by flooding world markets
supply of mercury, breaking quicksilver
with cheap quicksilver.61
2o6 BEGINNINGS OF CALIFORNIA INDUSTRY
CONCLUSION
a
Through backward linkages, California industrial nexus was created in the Gold
Rush. Its features and characteristics were determined by the responses of industrial
firms to increasing consumer demand and to the demands emanating from the gold
mining industry. In the process, Californias industrial capacity was created. An in

dustrial core, centered around foundries, machine tool companies, and the iron
working trades, developed. This base became the foundation for future industrial ex
pansion.
While the Gold Rush increased the demand for both consumer
and producer
care must be taken to keep
this factor in perspective. Demand is never
goods,
to over have generated
sufficient alone explain development. Boomtowns theworld
similar demands, but few managed to create an economic base that survived the ex
haustion of themineral that brought them into being. Virginia City, for example, did
not become another San Francisco. Gold presented the opportunity, but the real
was not
story is found in the response. Perhaps the greatest legacy of theGold Rush
its ability to attract gold miners, but its ability to attract entrepreneurs who seized the
opportunities that gold offered.
NOTES
i. are fromAndrew Rolle,
Population figures California: A History (Arlington Heights,
111.:
Harlan Davidson, 1987), 2,146,166, 241.
2. Robert Cleland and Osgood Hardy, TheMarch ofIndustry (San Francisco: Powell,
1929), 36.
3. Ibid., 1.
4. The Californian,May 29,1848.

5. John S. Hittell, The Resources ofCalifornia (San Francisco: A. L. Bancroft, 1879), 186.
6. Cleland and Hardy, March ofIndustry, 36.
7. Rolle, California, 166.
8. U S. Department ofCommerce, Historical Statistics oftheUnited States: Colonial Times
to 19J0 (Washington, D.C.: Government Printing Office, 1975), 25.
9. John S. Hittell, The Resources ofCalifornia (San Francisco: A. Roman, 1862), 304.
10. Hittell, Resources California (1879), 183-84.
of
11. Ibid.
12. Ibid.
13. Ibid.
14. Ibid., 184.
15. Rolle, California, 229.

16. Earl Pomeroy, The Pacific Slope (Lincoln: University ofNebraska Press, 1965), in.
Ibid., 112.
17.
18. Ibid., 113.
19.William A. Bullough, Richard J.Orsi, and Richard B. Rice, The Elusive Eden: A New
History ofCalifornia (New York: McGraw-Hill, 1996), 279.The role of energy shortages in
deterring the development of California industryhas been discussed in James C. Williams,
Energy and the Making ofModern California (Akron,Ohio: University ofAkron Press, 1997).
21. Rolle, 229.
California,
22.W. H. Hutchinson, California: Two Centuries ofMan, Land, and Growth in theGolden
State (Palo Alto, Calif: American West Publishing, 1969), 207.
24. Ibid., 133-34.
25. Gerald D. Nash, "Stages ofCalifornia's Economic Growth, 1870-1970: An Interpre

tation," inEssays andAssays: CaliforniaHistory Reappraised, ed. George H. Knoles (Los An
geles:Ward Ritchie Press, 1973), 39-53.
26. JohnW. Caughey, California: A Remarkable State's Life History (Englewood Cliffs,
Prentice-Hall, 202.
N.J.: 1970),
27. Carey McWilliams, California: The Great Exception (New York: A. A. Wyn, 1949), 216.
28. Ibid.
29. Ibid., 214.
30. Census data refers to US. Census taken in 1850, i860, and 1880.
ofManufacturers,
There was no census of in 1870. However, data is found in the
manufacturing manufacturing
1870 U.S. Census.
Population
31. US. Census of Manufacturers (1880), xii.
32. John S. Hittell, The Commerce and Industries of thePacific Coast of
North America (San
Francisco: A. L. Bancroft, 1882), 524.
33. California Division ofMines, Geologic Guidebook oftheSan Francisco Bay Counties, Bul
letin 154 (San Francisco: Division ofMines, 1951), 235, 238.
34. Hittell, Commerce and Industries of thePacific Coast, 572-75.
35. Ibid., 435.The following discussion is from this source.
36. Ibid., 436.
37. For a discussion of private coinage inCalifornia, see Edgar H. Adams, Private Gold
Coinage ofCalifornia, 1849?55: ItsHistory and Its Issues (Brooklyn: Edgar H. Adams, 1913).
38. Rodman W. Paul,Mining Frontiers oftheFar West, 1848-1880 (New York: Holt, Rine
hart and Winston, 1963), 31-32.
39. Hittell, Commerce and Industries of thePacific Coast, 520-22.
40. This discussion is drawn from Bullough, Orsi, and Rice, Elusive Eden, 196. Gold
dredging is also discussed inLewis E. Aubury, Gold Dredging inCalifornia, California State
Mining Bulletin No. 57 (Sacramento: California State Printing, 1910).
41. Paul,Mining Frontiers of theFar West, 33.
42. Hittell, Commerce and Industries of thePacific Coast, 657.
43. Ibid., 709.
44. Ibid., 707.
45. Ibid., 521.
46. Ibid., 657.

47. Ibid., 660.
48. Ibid., 658.
49. U.S. Population Census, 1870, 760. The figures immediately following on steam engines
are from this source
(pp. 496-98).
50. Paul,Mining Frontiers of theFar West, 31.

51. Ibid., 31-32. The following discussion is from this source as well.
52. U.S. Census (1880), xxi.
of
Manufacturers
53. Nathan Rosenberg, "Technological Change in the Machine Tool Industry,
1840-1910," The Journal ofEconomic History 22 (December 1963): 414-43.
55. Hutchinson, California, 218-19.
56. Hittell, Commerce and Industries of thePacific Coast, 425-26, 668.

57. Ruth Teiser, "The Charleston: An IndustrialMilestone," California Historical Society
Quarterly 25 (March 1946): 39-52. The following discussion of the Union IronWorks is
drawn from this source, aswell as fromRichard H. Dillon, IronMen (San Francisco: Can
dela Press, 1984).
59. For a similar observation about California see
agricultural implement producers,
McWilliams, California, 224.
60. Ibid., 221.
61. For a discussion ofNew Almad?n and California quicksilver seeDavid J. St. Clair,
"New Almad?n and California Quicksilver in the Pacific Rim Economy," CaliforniaHistory
73 (Winter 1994/95): 278-95; Jimmie Schneider, Quicksilver: The CompleteHistory ofSanta
Clara County sNew Almad?n Mine (San Jose, Calif: Zella Schneider, 1992); David J. St.
Clair, "California Quicksilver in the Pacific Rim Economy," in Studies in theEconomic His
toryof thePacificRim, ed. SallyM. Miller, A. J.H. Latham, and Dennis O. Flynn (London:
Routledge, 1998), 210-33.

Pruebita Ajsjasj

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Pruebita Ajsjasj

Uploaded by

Copyright:

Available Formats

The Gold Rush and the Beginnings of California Industry

Author(s): David J. St. Clair

Stable URL: http://www.jstor.org/stable/25462514

The Gold Rush and theBeginnings

THE CALIFORNIA ECONOMY ON THE EVE

population of 17,900 (10,000 assimilated Indians, 7,000 Spanish/Mexican descen

When the amateur artist

everything neglected but themanufacture of shovels and pickaxes.4

we have no statistics, must have suffered.

1870, and 865,000 in 1880.8 its first century as a state, California's

only into gold mining and agriculture?

HISTORIOGRAPHY OF CALIFORNIA INDUSTRY DURING

Historians have offered divergent views of California industry

Rice, William note that in i860 San Fran

tention" was sees

THE PACE OF INDUSTRIAL GROWTH DURING

comments about the pace of California are not

than the 396.4 percent growth

By 1870, California ranked twenty-fourth in population and sixteenth inmanu

CaliforniaManufacturing, Excluding GoldMining

Manufacturing Per Capita in i8yo

California 560,000 66,594,556118.92

not a flawless measure of the sector, but it is in

By 1880, California still ranked twenty-fourth in population and fifteenth in agri

THE EFFECT OF THE GOLD RUSH

LINKS TO CONSUMER GOODS INDUSTRIES

"quick-brewed beer" that

speed and quantity.

SelectedCalifornia ConsumerIndustriesEstablished by i860

Industry Year First Firm Location

Beer 1850 San Francisco

Book Publishing 1850 San Francisco

Coffee Grinding 1850 San Francisco

Coffins i860 San Francisco

1856 San Francisco

Cordials 1852 San Francisco

Furniture Factory 1857 San Francisco

Gold Beating 1853 San Francisco

Granite Quarry 1853 Mormon Island

Mustard Grinding 1850 San Francisco

Woolen Mills 1858 San Francisco

Paper 1852 Alviso

Plumbing 1853 San Francisco

Sailmaking 1853 San Francisco

Sugar Refinery 1855 San Francisco

Upholstery 1853 San Francisco

Vinegar 1854 San Francisco

source: the author from various sources.

of our manufacturing industries."36 However, ifCalifornia woolen mills had pro

trousers for California miners and workers. Folgers Coffee and

LINKS TO PRODUCER GOODS INDUSTRIES

Many industries were connected to the gold industry through supplier-customer

important industry inCalifornia. Courtesy Society ofCalifornia Pioneers.

ores. Both are very

Quartz, or hardrock, mining had the greatest impact on California industry.Gold

activity.41Later, hardrock gold mining in California, Comstock silver mining, and

were also used to

Hawaii, and Latin America, especially Mexico.44 California's explosives industry,

were use to other California

THE SPREAD OF GOLD INDUSTRY TECHNOLOGIES

were not confined to that sector. As

wright and carpenter in the

brothers, Peter, James, andMichael Donahue, theUnion IronWorks overcame the